What Is USD Coin And How Does It Work?
A week ago, we added a new cryptocurrency - USD Coin (USDC). Let's get to know better what it is and how it works.
USD coin or USDC is a stablecoin set to the US dollars. It was introduced on the 26th of September in 2018, in collaboration between the Coinbase and Circle. USD Coin is the best alternative to the USD backed cryptocurrencies as True USD (TUSD) or Tether, also termed as USDT.
USDC is a service that is used for tokenizing the US dollars and for facilitating its use over the internet as well as the public blockchains. Apart from that, the USDC tokens can also be changed back to USD at any point in time. This execution of USDC tokens issue and redemption is ensured with the smart contract of ERC-20.
The US dollars on blockchain allow its users to move them anywhere around the world, within a few minutes and also offer high-end stability to these cryptocurrencies. On the other hand, it has also opened up various opportunities for risk-hedging, lending, trading and a lot more.
Where did USDC come from?
USDC also called USD coin is the newest and trendiest stablecoin. After its launching, it was made available to its users in October, 2018. This project was initiated by the Coinbase in collaboration with the Circle.
This development included the Centre consortium, also called as the Circle and the Coinbase joint association. Its investors around were the Pantera, Bitmain, and the Digital Currency Group and many more.
Moreover, its governing framework and technology are developed by the Center, but its first commercial issuers are Coinbase and Circle only. The Circle came into existence in the year 2013 by entrepreneurs Sean Neville and Jeremy Allaire.
The Circle is the official money transmitter which creates the company as an open financial book. All the USDC tokens are transparent, regulated and verifiable.
What are the benefits of USD coin?
This USD Coin (USDC) is developed on the basis of the ERC-20 standards; this means that the speed of the funds transfer is highly amazing as the ETH. As mentioned on the official website of the Circle, people now with the best assistance of USDC can transfer US dollars within few seconds all around the world.
There are various experienced developers behind this development who made this funding process hassle-free. The company which has created USDC is also working for this cryptocurrency world for years, so they are more trusted by the people.
Various organizations and even individuals can deposit their US dollars from their savings or business bank accounts and can convert their money into tokens. This way they can purchase and can withdraw money with USD Coin (USDC) tokens anytime, anywhere.
How to purchase USD coin on XMLGold?
It is much possible now to buy USD coin for other cryptocurrencies or e-curencies using XMLGold (Online Currency Converter) service. You just need to follow the below-given instructions:
- - Select the currency which you are willing to exchange from their first drop-down list. Place an amount that you are willing to swap.
- - Choose USD coin from their second drop-down list. You will find the estimated value that you will get after its exchange.
- - Enter your receiver’s address. The USD coin will be sent to the address entered. You need to be very careful while entering the address, and make sure you enter the correct address.
- - Re-check all the information entered. If everything is O.K. on your side, click on the exchange option.
- - You will find the deposit address details. You have to transfer the minimum amount to this address for starting the exchange.
That’s all! In a few minutes, you will get your USD coin.
How does USDC work?
The Circle assures that every USDC token they issue is backed with the US dollar. This process to turn US dollars in the USDC tokens is known as tokenization. Tokenizing the USD in USD Coin (USDC) is called as the 3 step process:
- - Here the user sends the USD to the bank account of the token issuer.
- - This way the issuer makes use of USDC smart contract for creating the same amount of USDC.
- - The newly stamped USDC is then delivered to its user, while its exchanged US dollars are kept in the reserve.
The redemption of USD coin for USD is also simple as stamping the token. Here the process is reversed:
- - The user sends a request to USDC issuer for redeeming the equivalent amount of this USD for USDC tokens.
- - The issuer here sends a request to the USD coin smart contract for exchanging tokens for the USD and takes an equivalent amount of the tokens out of its circulation.
- - The issuer sends the requested amount of the USD from it and reserves back to the account of the user’s bank. This way the user gets the net amount which is equal to the one in the USD coin, reducing all incurred fees.
Unlike the popular stable coin USDT (Tether), the creators of USD coin are compelled for offering full transparency and works with a wide range of financial banks for maintaining full reserves of similar flat currency. All the USD Coin (USDC) issuers are also required for regularly reporting the USD holdings, which gets published later by the Grant Thornton LLP.
How to make use of USD coin?
USD Coin is a 1:1 representation of the USD dollar on Ethereum blockchain. It is an ERC-20 token and can be easily used with every application which supports its standard. For tokenizing and redeeming the USDC with the Circle, you are supposed to register an account, verify the identity and quickly link with a legitimate bank account.
You can use the USD platform of the Circle for performing 4 different works,
- - Tokenizing the USD
- - Redeeming USDC
- - For transferring USDC to ERC20 compatible addresses of Ethereum
- - And for depositing the USDC from the external wallet addresses of Ethereum.
The USD Coin (USDC) allows sending money globally, securely and instantly at low cost. On XMLGold you will be able to convert USD Coin to Perfect Money EUR/USD, Advcash EUR/USD, Payeer EUR/USD, SEPA Transfer, SWIFT Transfer, Litecoin (LTC), Tether (USDT), Bitcoin (BTC), Perfect Money Voucher EUR/USD, Ecoin Voucher USD, C-CEX Voucher, ERC20, True USD, XMLToken. Exchange Process is fast and simple! Join Now!